Published: April 5, 2011

House Republicans rolled out a 2012 budget today that aims to vastly reshape federal policy on a number of fronts, cutting energy research, agriculture subsidies and the government workforce while lifting current "moratoriums and bans" on domestic fossil-fuel exploration.

The budget blueprint released by House Budget Chairman Paul Ryan (R-Wis.) marks a raising of the stakes for a 2011 spending battle that continues to leave the capital braced for a potential Friday shutdown. But even as Ryan's plan generates national attention for its approach to entitlements and corporate taxes, his budget also promises to be a potent vehicle for advancing domestic production and regulatory easing proposals that Republicans have dubbed the "American Energy Initiative."

Ryan's rundown of the House GOP budget, which his committee is set to begin marking up tomorrow, blasts the Obama administration for creating "a heavy-handed compliance culture in the energy sector" through regulations and spending, particularly the 2009 stimulus law.

"The results are plain to see: Gas prices have more than doubled since the President took office," the House GOP budget summary states. "Burdensome and ineffective regulations on businesses in the service of dubious environmental goals have driven up the prices of many products and services, while creating barriers for needed capital investment and job creation."

That blistering critique mirrors much of the rhetoric that Energy and Commerce Chairman Fred Upton (R-Mich.), and Natural Resources Chairman Doc Hastings (R-Wash.) have employed all year long in bidding to remake White House energy and environmental efforts. The series of energy-related legislation that Republicans are advancing as part of their "initiative," given a plug in Ryan's budget, include plans to speed up oil and gas permitting in the Gulf of Mexico and expand offshore leasing (Greenwire, March 29).

The Ryan budget vows to remove "bureaucratic barriers" to domestic energy production, in part by lifting "moratoriums on safe, responsible energy exploration in the United States." While promoting an end to current de facto bans on offshore drilling in the Atlantic, Alaska and the eastern Gulf of Mexico, the budget also promises to promote "nuclear, wind, solar, and more" low-carbon energy sources.

The budget's top-line plan for $5.8 trillion in cuts to projected spending over the next 10 years did not include more granular estimates of where federal environmental and energy funding would be most deeply pared. But U.S. EPA is likely to face further austerity under the GOP's 2012 plan, particularly in light of the $3 billion in cuts for the rest of 2011 that the House passed as part of its February continuing resolution (CR).

After noting that EPA "received a 36 percent budget increase in just two short years," the Ryan plan vows to cut "government bureaucracies seeking to impose a job-destroying national energy tax" -- an apparent reference to the agency's greenhouse gas emissions regulations.

Democrats joined clean-energy advocates in gearing up to parry Ryan's budgetary priorities almost as soon as he left the stage today.

The former camp focused on tax benefits for major oil companies that would continue under the GOP budget, and the latter took on the budget chief's plan to slice federal spending on "applied and commercial [energy] research or development projects best left to the private sector."

The House budget "protects existing regulated markets and guts innovation -- particularly applied research and development that are parts of the valley of death for too many companies -- while pulling the rug out from under clean energy deployment," Josh Freed, director of the energy program at the centrist think tank Third Way, said in a statement.

"As troubling, it continues business as usual on fossil fuels under the guise of reducing regulation and increasing energy independence."

The budget panel's top Democrat, Rep. Chris Van Hollen of Maryland, rapped Ryan and his party for "trying to focus on a very, very narrow piece of the budget" by slashing domestic discretionary spending to 2008 levels and freezing them for five years.

"They don't want to talk about cuts to things like subsidies for the oil companies," Van Hollen said of the Republicans on CNN, invoking a favorite line of attack for Democrats (E&E Daily, April 5). "And so, if we're really going to have a conversation about reducing the deficit, you need everything on the table."

Workforce and farm payments

In addition to the expansion of domestic fuel exploration and cuts to energy research, Ryan's budget also aims to shrink the size of the federal workforce by requiring that only one new worker be hired for every three who retire.

That mandate, according to the House budget, would amount to 10 percent cut to the federal workforce over the next three years. Federal workers' pay, meanwhile, would be frozen until 2015.

The House budget also seeks to overhaul the current farm-subsidy structure by slicing "the fixed payments that go to farmers irrespective of price levels" and ending what Ryan's team referred to as "open-ended" agriculture supports.

Cutting those agriculture benefits is a longstanding goal of fiscal hawks who hotly anticipated today's GOP budget. But the ultimate reshaping of farm payments rests with the Agriculture Committee, as Ryan's plan notes, and is not expected to begin until the next farm bill takes effect -- giving industry interests ample time to lobby for the current system to remain in place.

Briefing reporters today alongside Senate Budget Chairman Jeff Sessions (R-Ala.), Ryan did not back down from his past predictions that the GOP budget could become a cudgel for Democrats who are already lambasting its major shakeups to Medicare and Medicaid.

Asked if his fellow Republicans had expressed concern that the budget could put them in a political bind, Ryan quipped: "You know, none of them say that -- just kidding."

New stopgap CR nixed?

Even as Ryan moved the Capitol Hill spending dialogue toward 2012, maneuvering over the 2011 budget cycle remained intense today. Speaker John Boehner (R-Ohio) and other leaders left a White House meeting this morning emphasizing that no deal had been reached ahead of Friday's deadline to keep the government open.

Moreover, Republicans criticized the White House for ruling out a seventh stopgap funding plan -- released by House appropriators in the witching hour today -- that pays for Pentagon operations until fiscal 2012 while cutting $12 billion over the next week in other federal programs (E&E Daily, April 5).

"[W]hat really it looks like is the White House now has increased the likelihood of a shutdown in just dismissing out of hand a vehicle that we have put forward that says look, we don't want a shutdown," House Majority Leader Eric Cantor (R-Va.) told reporters today.

In a summary of the White House meeting released to reporters, Boehner's office underscored that it has not given ground on the multiple policy riders that were attached to its February funding plan -- more than a dozen of which restrict administration environmental policies.